First-time buyers: check your credit history

While 87% of those surveyed said they recognised that having a good credit rating is important for their future financial situation, only 51% of would-be buyers have checked their credit report recently. What’s more, only 49% are actively working to improve their credit score before making their application, in spite of the fact that building a good credit history is a key factor in getting a mortgage and also getting the best rates.

So, first-time buyers or otherwise, how can you best prepare for a mortgage application?

1. Check your credit reports to make sure everything is accurate and up to date. Tell the credit reference agency you’re using as soon as possible if you disagree with any information on your credit report so they can investigate.

2. Try and avoid making other credit applications in the six months prior to making a mortgage application, as it could look like you are struggling financially and can have a negative impact on your Experian Credit Score.

3. Since the introduction of the mortgage affordability rules last year, there has been closer scrutiny on not only your credit history but also your budgeting and financial planning. It’s worth trying to save a little every month and finish every month with a surplus.

4. Lenders will look at whether the total amount of credit you are using has increased or decreased year-year. If you are planning on applying for a mortgage, see if you can bring overall credit usage below what you owed a year ago in order to boost your Experian Credit Score.

5. It is vitally important to meet any agreed current repayments you have and paying a little more than your agreed minimum card repayments will not only reduce your balance more quickly but will also be a positive factor for your Experian Credit Score.

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